Is The Biggest Bull Signal Here?

Bitcoin broke the $5,000 mark on April 2 grabbing the headlines across the globe. For traders, it was mainly about FOMO (Fear Of Missing Out). It is natural to have this kind of feeling especially if one has paid attention to the past performance of Bitcoin. Year-to-date it is up 34 percent. Since 2014, there have been several bull rallies for Bitcoin and each of this was stronger than the previous one. I have explained it in this article and still maintain my call in relation to this.

. Photographer: Chris Ratcliffe/Bloomberg

© 2018 Bloomberg Finance LP

Best bull signal & past performance

To keep things simple, I am going to keep the focus on the moving averages as these get the most amount of attraction from bigger institutions that trade traditional assets. The concept is the same over here as well.

For the Bitcoin price, the 50-day Smooth Moving Average (SMA) (shown in pink color on the chart below) and the 100-day SMA (shown in green color) on the daily time frame are really important. The argument is that the crossover of the 50-day and 100-day SMAs is of critical importance. This is because it represents a buy and sell signal. History tells us that when the 50-day moving average crosses above the 100-day moving, it produces a solid buy signal. The last crossover occurred back in April 2016. The exit signal comes when the price drops below the 50-day moving average.

Bitcoin’s daily chart shows 50-day moving average crossed above the 100-day moving average back in April 2016.

Source: ThinkMarkets, Bloomberg, Twitter:@NaeemAslam23

Similarly, when the 50-day moving average drops below the 100-day moving average, it presents a short opportunity. Again, the exit signal comes when the price crosses above the 50-day moving average.

The below chart shows that the 50-day moving average has crossed…

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